As Chipchase reports, Chinese firms sell 1.6 billion phones a year--and shanzhai producers "are starting to outpace the markets that they originally aspired to." He adds, "They're not satisfied with just copying. Shanzhai manufacturers are actually driving experimentation in the marketplace." One example: a phone that can take two SIM cards--a boon in places where service is spotty and you need two lines. He also suggests that these firms in the economic underground get their products from R&D to retail stores amazingly quickly.

The shanzhai 'hiPhone' may not be as good as the genuine iPhone, but it's far cheaper--making it a reasonable choice for people who can't afford the real thing but want some reflection of its looks and functionality. Far from being a drag on development, the existence of the informal economy is helping to bridge the digital divide.

About Me

I spent most of the past four years hanging out with street hawkers, smugglers, and sub-rosa import/export firms to write Stealth of Nations, a book that chronicles the global growth of System D--the parallel economic arena that today accounts for half the jobs on the planet.
Prior to that, I lived in squatter communities across four continents to write Shadow Cities, a book that attempts to humanize these vibrant, energetic, and horribly misunderstood communities.
My articles on cities, politics, and economic issues have appeared in many publications, including Harper's, Scientific American, Forbes, Fortune, The Nation, The New York Times, The Washington Post, Metropolis, and City Limits. Before becoming a reporter, I worked as a community organizer and studied philosophy. I live in New York City and do most of my writing on manual typewriters.